Two more rural Georgia banks fail

Two more small rural Georgia banks failed Friday, bringing the state’s total to a nation-leading 46 since 2008.

First National Bank of Barnesville, with branches in Lamar and Pike counties, south of Atlanta, was seized and sold to United Bank of Zebulon. Gordon Bank in tiny Gordon, Ga., 20 miles east of Macon, was closed and sold to Morris Bank of Dublin, Ga.

The failures are the first in the state since three lenders were shuttered Sept. 18. Sixteen banks have been closed in Georgia so far this year.

First National will reopen Saturday under the United Bank flag, while Gordon Bank’s lone branch will reopen Monday as Morris Bank.

The causes of the failures are familiar to Georgia: overindulgence in real estate. But unlike most of Georgia’s bank failures, these institutions weren’t young banks.

First National Bank of Barnesville was founded in 1902 and survived the Great Depression, but could not escape the fallout of the Great Recession. The bank had two branches, $131.4 million in assets and $127.1 million in deposits at the time it closed.

United Bank agreed to assume all deposits and the bulk of First National’s assets in a loss sharing deal with the FDIC. The cost of the failure to the FDIC’s insurance fund is expected to be $33.9 million.

About 75 percent of the bank’s loans were tied to real estate at the end of the second quarter. A quarter of the bank’s loans were considered past due, in default or foreclosed as of June 30. The bank lost $7 million during the first half of the year, according to FDIC data.

The acquirer, United Bank,  is a $941 million-in-assets lender with a headquarters 12 miles away in Zebulon and was long a rival to First NationalThe deal marks United's third acquisition of the banking crisis.

Gordon Bank, founded in 1946, was the only one in its namesake city of 2,100 residents.With $29.4 million in assets and $26.7 million in deposits, it was among the smallest banks in the state. Morris Bank agreed to acquire $11.5 million in assets, mainly cash and cash equivalents. The expected loss to the FDIC is $9 million. More than 40 percent of the bank’s loans were in some stage of delinquency, default or foreclosure.

Also Friday, Ameris Bank, a $2.4 billion in assets lender based in Moultrie, Ga., acquired the failed First Bank of Jacksonville, Fla.